Investing Wisdom from Howard Marks of Oaktree CapitalMy regular listeners probably heard one of my earlier segments where I spoke about Howard Marks, the 67-year old billionaire who co-founded investment management firm Oaktree Capital which now manages about $84 billion in assets and is a publicly-traded company with ticker symbol OAK.Oaktree focuses its investments on high-yield bonds, distressed debt and private equity, and has delivered a whopping 23% average annual return over the past 25 years… so Marks has rightly earned his fame and fortune. To give you an idea of just how much a 23% rate of return is: If you invested $10,000 25 years ago, it would be worth $1,769,000 today.And, like Buffett, Marks too sends out folksy memos to Oaktree clients where he outlines his views on investing, the markets and the economy that are insightful, direct and sharply written. And today, I’m going to share a few insights from Marks’ latest memo – morphing his thoughts so they apply to individual financial planning. I’ve decided to break this up into a two-part series – with the first half of Marks’ memo today, and the rest to follow next week.Key Questions to Ask FirstSo in this latest memo, Marks first addresses philosophical questions on what to consider in setting up your investment portfolio. Once you have a clear idea on what your investment goals are, based on your retirement needs, Marks says you should discuss the following questions with your advisor:- Is it possible to build a retirement portfolio that can beat the market? If yes, then how, and to what extent can we beat the market?- What’s the best way to manage risk?- How do we define success, and what risks are we willing to take to achieve investment success?Then, as you build your portfolio, you’d want to balance it out between index investments (where you should not expect market-beating returns), individual stocks such as dividend payers, and perhaps some alternative investments to a smaller extent. If you’re closer to retirement, you might also want the safety of inflation-protected bonds. And for the safety of bonds, index investments and dividend stocks, you should be willing to accept “average” performance. But for the alternative investment portion of your portfolio, you should expect above-average or superior returns, as Marks calls it.Pick Funds that Dare to be DifferentFor your alternative investments where you’re seeking superior returns, look for funds that are backed by a strong track record, and where fund managers dare to be different. You see, if you pick a mutual fund that’s run by a manager who is essentially following or mimicking what others are doing, you’ll just end up paying high fees without getting any real bang for your buck.So for this alternative portion of your portfolio, look for managers that are courageous enough to be different and open to being wrong… managers who assemble a portfolio that is different from those held by most other funds. As Marks puts it, to be a top performer, the fund manager has to “escape the crowd” by being active in unusual market niches, buying things others haven’t found, don’t like or consider too risky to touch. A good alternative fund manager avoids what the market considers to be a darling, or all the rage, and engages in contrarian cycle timing, and concentrates heavily in a small number of things that he thinks will deliver exceptional performance… everything that personifies great investors such as Howard Marks and Warren Buffett.As Marks puts it “the cautious seldom err or write great poetry” in referring to fund managers that follow the herd.So look for fund managers who dare to be different, have a consistent history of market-beating performance and are transparent with their investors. That said, you also need to recalibrate your expectations with such alternative funds because their investments often could take longer to bear fruit… so only invest a small portion of your funds that you’re not planning on touching till you reach retirement… because if you picked the right alternative investment fund, those superior returns could compound very nicely over time.Now I know that it’s near impossible for most individual investors to really evaluate alternative investment funds, so this is where a good, qualified advisor can offer advice and help kick some of your returns into high gear.And as I mentioned above, Marks’ company – Oaktree Capital – is publicly traded with ticker symbol OAK, so you can buy shares to participate in Oaktree’s success; When you invest shares in OAK, you are not buying into Marks’ portfolio, but rather participating the company’s profit from its portion of the investment it takes for itself and the fees that are generated from his clients. Oaktree shares also offer a pretty compelling 7.7% dividend yield at current levels… but this is not a recommendation so please do your own research should you consider buying Oaktree.Most great investments begin in discomfort.Most people feel good about making investments where the underlying premise is widely accepted, where recent performance has been positive and where the outlook is rosy – but such investments are high in demand and are unlikely to be available at bargain prices.Bargains are usually found among things that are controversial, that people are pessimistic about, and that have been performing badly of late – investments that generate discomfort for most people. And this is where good alternative funds excel. For example, Oaktree Capital focuses on distressed debt – bonds issued by companies that are on the ropes in some way or another, bonds that are priced at pennies-to-the-dollar… bonds that comfort-seeking investors would not even think about. This discomfort is what causes distressed debt to be priced cheaper than it is really worth, and it’s one sector that has helped fuel Oaktree’s outsize returns. This area of investing is practically impossible for the typical investor to get into and one has to have superior skills in order to avoid being burned badly if things don’t work out.Marks also says; Dare to Be WrongMarks also reminds us that with courageous, discomfort-generating investments, you must also be prepared for failure as an inescapable potential consequence of trying to do really well. In other words, be prepared to lose money on this alternative portion of your portfolio… it’s not something anyone wants, but get into alternative investments with the understanding that non-mainstream investments could be harder to liquidate and have greater risk, and while your fingers are crossed for the upside, be aware that you could also lose money. That said, a good alternative investment fund should protect you significantly on the downside too.So look for alternative funds that invest judiciously, have more successes than failures, and make more on their successes than lose on their failures.Alas… No Magic FormulaMarks also cautions us that there is no easy formula to produce superior risk-adjusted returns – because if there were, everyone with a positive IQ would be rich.Or, as good ol’ Charlie Munger, Warren Buffet’s Partner bluntly puts it, “Investing is not supposed to be easy. Anyone who finds it easy is stupid” and does not understand investing’s complex and competitive nature. Hardly the words of someone who wants to be politically correct, but he makes a good point. Why should successful investing be so easy that the uneducated and lazy investor achieves superior rate of return? It just doesn’t happen that way.Superior investment results can only come from a better-than-average ability to figure out when risk-taking will lead to gain and when it will end in loss. And this is not easy task. So it’s good to look for fund managers that ideally have a strong background in economics, financial math, accounting and investment analysis.Okay, I’ll wrap up here for today, and continue with more on Howard Marks’ thoughts on investing next week.
How to Choose Between React & Angular for Your Project
React and Angular are two popular JavaScript frameworks used for developing web applications. Both frameworks have their strengths and weaknesses, and the choice between them often depends on the project’s specific requirements. In this article, we will compare React and Angular and explore why React is more important than Angular.
React is a lightweight and fast framework that was developed by Facebook. It allows developers to build complex user interfaces using a component-based approach. React is known for its ease of use, flexibility, and scalability. It has a large and active community that provides extensive support and resources.
Angular, on the other hand, is a comprehensive framework developed by Google. It is a complete solution for building large-scale, complex web applications. Angular is known for its rich features, including two-way data binding, dependency injection, and directives. However, it has a steep learning curve and requires a significant amount of time and effort to master.
One of the main reasons why React is more important than Angular is its flexibility. React can be used for a wide range of applications, including web, mobile, and desktop development. It can also be easily integrated with other libraries and frameworks. In contrast, Angular is primarily focused on web development and has limited support for other platforms.
Another advantage of React is its virtual DOM. The virtual DOM is a lightweight representation of the actual DOM, and it allows React to efficiently update the user interface without reloading the entire page. This results in faster performance and a smoother user experience. Angular, on the other hand, uses a real DOM, which can be slower and more resource-intensive.
React also has a more straightforward syntax and a smaller API compared to Angular. This makes it easier for developers to learn and use. React’s modular structure also makes it easier to maintain and update code, especially in large applications.
React JS has become one of the most popular and widely used JavaScript libraries in recent years. Developed by Facebook, React has gained widespread adoption due to its many benefits and advantages over traditional web development frameworks. In this article, we will explore the importance of React JS and why it is such a critical tool for web developers today.
1. Improved Performance
React JS is built around a unique concept known as the Virtual DOM (Document Object Model). This concept allows for faster rendering of web pages by only updating the necessary parts of a web page that have changed. By reducing the amount of processing and computation required for rendering web pages, React JS delivers exceptional performance and helps websites to load faster. As a result, developers can create complex and feature-rich web applications that run smoothly on a wide range of devices.
2. Reusability
Another critical benefit of React JS is that it is highly modular and designed for reusability. React JS components can be easily reused in different parts of an application, which results in faster development cycles and reduced costs. Furthermore, the modular structure of React JS also makes it easier to maintain and scale applications as they grow.
3. SEO-Friendly
React JS also offers SEO (Search Engine Optimization) advantages over traditional web development frameworks. Since React JS is primarily a client-side library, it allows search engines to easily crawl and index content. This means that content created using React JS is more likely to rank higher in search engine results pages, leading to more traffic and better visibility.
4. Cross-Platform Compatibility
React JS is cross-platform compatible, which means that applications created using React JS can run on multiple platforms, including web, mobile, and desktop. This versatility allows developers to create applications that work seamlessly across various devices, making it easier for users to access and interact with their content.
5. Large and Active Community
React JS has a massive and active community of developers, which contributes to the development of the framework, provides support, and creates new and innovative tools and libraries. This community is constantly updating React JS, making it more stable and secure while also introducing new features and functionality.
In conclusion, the importance of React JS cannot be overstated. React JS is fast, modular, scalable, SEO-friendly, cross-platform compatible, and has a large and active community of developers. These factors have made it an essential tool for web development in today’s fast-paced and competitive digital landscape. Whether you are a seasoned developer or just getting started with web development, learning React JS is essential to stay ahead of the curve and create high-quality, performant web applications.
Finally, React has a larger and more active community than Angular. This means that there are more resources, libraries, and tools available for developers to use. The community also provides extensive support and contributes to the development of the framework.
In conclusion, while both React and Angular have their strengths and weaknesses, React is more important than Angular due to its flexibility, virtual DOM, simpler syntax, and larger community. React’s popularity and ease of use have made it a go-to choose for many developers, and its importance in the web development industry is likely to continue to grow.
Get the Career You Want Through Online Education
Are you working in your dreamed career field? If you are one of those who can’ made your dreamed career comes true, online education will be your best path to earn a career degree to enter a career field that was your career goal when you were at college. With the available of online education programs, going back to study is easier than ever, you can even do it without the need to quit your current job or affecting your family and social commitments.With the growing trend of online education programs, you can find almost any career related online courses offered by accredited online schools. Many of these online education programs are designed for working adults who want to earn a certification or degree in their area of interest without having to stop life on its course. The key elements that make online education the best option for working individuals are flexible learning environment and remote log on to the online classes from any location have made easy for working adults to go for study in their favorite subjects while maintaining their current job and lifestyle.Here are a few steps to find an online education program that meets your career goals:1. Identify Education Requirements Before you start searching for an online education program, you need to identify what are the education requirements in order for you to get the career you want. For example, if you want to become an accountant, you need to earn at least of bachelor or master’s degree in finance; and you may need to have a forensic accounting degree if you want to become a forensic accountant. Then, identify the level of degree you want to pursue, such as bachelor, master or PhD.2. Search For Online Education ProgramsOnce you know what type of online education programs to look for, search for a list of online education programs offered by various accredited online schools that meet your goals. Usually, you will find many similar online education programs offered by different online schools. You may need to short list them with a few criteria such as the school reputation, program cost, and the courses of the online education programs that best fit your needs.3. Request Information From Online SchoolsThe information about the online education programs found at the school’s website may not be detailed enough for you to make your decision. Hence, you should request the schools to send you the details information about the education programs so that you can review and compare them before you make any decision. Most online schools are providing free information packs on their education programs, what you need to do is fill up a simple form to let the schools know what type of online education programs you are interested in and where to send you those information.4. Apply For Admission & Earn The DegreeOnce your have decided an online education program to go for, admission application is simple and it can be done online. You need to fulfill all the admission requirements in order to be accepted by the online school. Then, you should work hard and smart to complete the program to earn the degree that is required to make a career switch.SummaryOnline education has made easy for working adults to go back for study without the need to give up their current job. You can get the career you want by earning a career related degree through online education program without give up your monthly pay check.